Audit knocks TDDs for bid process

Justin Willett

Thursday

Feb 25, 2010 at 12:01 AMFeb 25, 2010 at 11:40 AM

In her latest audit report on transportation development districts, Missouri Auditor Susan Montee criticized two Columbia districts for awarding professional services contracts to local firms with connections to the property owners without soliciting requests for proposals.

The districts — Grindstone Plaza and Broadway-Fairview — charge an additional half-cent sales tax on purchases within their boundaries, and the proceeds go to fund transportation improvements in and around the shopping centers, both of which are anchored by Walmart Supercenters.

The property at Broadway and Fairview is owned by Broadway-Fairview Venture LLC, and the Grindstone property is owned by THF Grindstone Plaza Development LLC. St. Louis businessman Michael Staenberg is the registered agent for both entities and is a partner with local billionaire Stan Kroenke in THF Realty.

Montee said her critiques, which include issues with revenue projections and budgeting, “are not major problems” but are “fairly standard things that we see” with TDDs “that we wish we wouldn’t.”

State law doesn’t require districts to solicit proposals for professional services, but Montee said it’s a good idea. “Good business practice says you bid these services out,” she said.

According to Montee’s report, the districts chose their legal counsel — Columbia-based Van Matre, Harrison and Hollis PC — and primary engineer — Columbia-based Engineering Surveys and Services — based on each firm’s “long-standing working relationship with the developer.”

The Grindstone Plaza TDD started collecting its sales tax assessment in March 2006 and through the end of last year had collected $1,302,117.38, according to the Columbia Finance Department. Through December 2007, the district paid $227,500 to Van Matre, Harrison and Hollis. The district paid Engineering Surveys and Services $197,000, according to the audit report.

The Broadway Fairview TDD started collecting sales tax revenue in October 2006 and through the end of last year had collected $972,895.95, according to the finance department. Through December 2007, the district paid the law firm $157,000 and the engineering firm $304,000.

Robert Hollis, a partner in Van Matre, Harrison and Hollis, declined to comment and directed calls to an official at THF Realty who did not respond to a voice message by deadline.

The same ownership group controls three other local transportation development districts — the Rock Bridge, Conley Road and Shoppes at Stadium districts. The five districts together had collected $7,790,163.17 through the end of last year.

Montee’s report also noted the districts did not solicit requests for proposals for bond underwriting firms. Sales tax revenue projections also were off, Montee said, but that was the case with most districts, reflecting an inability to forecast the recession that led to reduced sales tax collections.

Lori Fleming, Columbia’s finance director, said a change in state law relieved cities of the responsibility for collecting sales tax revenue from TDDs within their boundaries. The state now collects the money.

Through the end of last year, the city had collected a total of $10,642,103.06 for the nine districts that operate within Columbia, she said.

Never miss a story

Choose the plan that's right for you.
Digital access or digital and print delivery.